Is it better to pay a truck off early say like in a year or is it better to continue payments for 3 years for tax purposes. Please explain your view... Thanks.
Pay off truck early?
Discussion in 'Ask An Owner Operator' started by Wild Murphy, Sep 4, 2015.
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Pay it off. Tax write offs are not revenue streams. More than likely the interest you save is more than you're saving from the write off. Always best to not be leveraged. No one can touch you then. No pressure. Life is good.
brian991219, ramblingman, HalpinUout and 6 others Thank this. -
Are there any early payment penalties?
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Wild Murphy Thanks this.
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It's always better to have it paid off and put the payment into your maintenance and replacement fund. You have to pay a whole lot in interest to save a little on your taxes, it's not worth it.
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If no payoff penalties... pay it off, for the reasons listed previously.
Wild Murphy Thanks this. -
Pay off loan. All loans. Interest paid is likely more than any taxes saved.
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Its always cheaper to pay the taxable amount. Then buy a part only to use it as a deduction.
Get rid of those monthly interest payments.
Curious how much per month is your interest. I would like to translate that yearly interest amount into what a deduction will look like to give that figure: equality.brian991219 Thanks this. -
The only part of a payment that is tax deductible is the interest. The depreciation in the value of the truck is a deduction, but you take that over a scheduled set of years, so you get it whether you're paying a payment or not. Example - you have $60k cash to buy a truck. You walk in plop down your money and drive away. At tax time, you deduct only a portion of the value of the truck. What you have saved, like earlier posts have said, is the 10 or 11% (or what ever the going rate finance companies charge now) in interest on a used truck.
brian991219, Wild Murphy and xlsdraw Thank this. -
pay it off early if there is not a prepayment penalty and invest the money you saved from the payments into an investment of your liking
Wild Murphy Thanks this.
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